The primary concern for most Canadians when planning their estate is what will happen to their assets when they are gone, not who will manage their estate affairs after they’ve died or what their legal rights are.
Just as important as leaving behind a clear set of instructions for anyone you assign the task of handling your personal and financial affairs in the event of your death is the task of selecting a trusted and responsible estate executor to ensure that your wishes are abided by.
To help you get to grips with exactly who is involved in planning and executing your estate, here are descriptions of the main roles:
Executors and their role
Often referred to as a personal representative, a will executor is a person assigned to administer your estate and manage it after your death. They will follow all of the instructions given in your will, and to settle your estate, they will pay off any existing debts and distribute what funds are left among the listed beneficiaries in your will.
Here are some of the important tasks they will carry out as executor of your estate:
- Collect debts from people or businesses owing money to you.
- Pay all outstanding bills and shut down any bank accounts.
- Liquidate real estate, retirement accounts, and other assets.
- File income taxes on your behalf and pay any necessary estate taxes.
To make sure your affairs are settled properly and lawfully when you die, your chosen executor will likely work closely with an estate lawyer and/or accountant.
Once the estate has been settled, the executor will then go ahead with distributing any assets remaining to your chosen beneficiaries.
Beneficiaries
When planning your estate, you must name people and/or organizations with whom you wish to receive your assets once you are no longer here. Spouses, kids, siblings, and friends are commonly named as will beneficiaries, and it’s important to list them in any life insurance policies you also hold so that you can be certain they’ll receive any death benefit without your estate having to be worked through.
Who can you name as an executor?
It’s essential that you appoint someone to manage your estate that you have trust in. This can be a family member, a close friend, or even an estate lawyer, should you not have anyone suitable for the role.
Executors are expected to act in the best interests of your beneficiaries and abide by your wishes as expressed in your will when distributing assets.
Administrators
Should you not have made a will or failed to name someone to manage your estate, an administrator will be appointed by the court to deal with your estate in the event of your death.
Enduring power of attorney
If you are left cognitively impaired or incapacitated due to an illness or accident, having someone responsible and trusted to make financial decisions on your behalf is crucial. This person is called an attorney and must be appointed while you are of sound mind and still able to make decisions about your own finances.
You can either exercise an enduring power of attorney once you become mentally incapacitated, or you can also choose for it to come into effect when signed or on a certain date.
If you don’t have an enduring power of attorney, family members or close friends can become a trustee on your behalf, following a court petition.
Personal directives for decisions related to health care
Should you yourself be unable to make any personal decisions, you can create a personal directive outlining your wishes and appoint a trusted person (who will be named as a health care agent) to carry them out. These may include refusal of medication and sustenance, resuscitation orders, and options for sedation to make the end-of-life process more comfortable.
Trustees
A trustee can be appointed should you die leaving any minors as estate beneficiaries, who will manage the assets of the trust and ensure any young children are cared for using appropriate estate funds.
Don’t leave the planning of your estate until it’s too late; begin by scheduling a consultation with a will executor in Alberta and give yourself the peace of mind you deserve.
